Global consumer health and hygiene company Reckitt (formerly known as Reckitt Benckiser) on Friday said that developing markets’s revenue growth was led by countries such as India in the first quarter. It also said that increased distribution helped its brands such as Harpic witness strong growth in India.
“Revenue of developing markets (in Q1) grew 5.7 per cent on a like-for-like basis, driven by Latin America, India and Greater China,” it said in its earnings release.
Harpic’s largest market
Reckitt’s top management on an earnings call pointed out that in India the company “continued to drive increased distribution” of its brands. Product upgrades and increased distribution helped the brand Harpic register a strong growth in India, the company added. India is Harpic’s largest market and the company had said last year that over 100 million Indian households use the brand. In March, the company had announced that it has launched the brand with a changed formulation to meet evolving Indian consumer needs.
Meanwhile, Reckitt said that its “pest business delivered low-single-digits growth despite a week season in India and Latin America,” Reckitt stated in its earnings statement. Mortein is the company’s key brand in this segment in India
Dermicool sale
The March quarter also saw Reckitt sell its prickly heat powder and cool talc brand Dermicool in India to Emami for ₹432 crore, which was completed on March 25. This is part of the company’s broader strategy to reposition its portfolio for higher growth.
“The sale of Dermicool and E45 completed on 25 March and 1 April, respectively, with combined net cash proceeds of around £240 million. The combined 2021 net revenues and adjusted operating profits of these brands were £54 million and £29 million, respectively,” Reckitt stated.
“As we look to the balance of the year, the operating environment remains highly unpredictable. We are well placed to address these market dynamics through the strength of our brands, our favourable product mix, our productivity programme and the responsible pricing initiatives already undertaken, with scope to take further actions,” said Laxman Narsimhan, Global CEO, Reckitt in the earnings statement.
Inflation woes
Talking about the inflationary pressures, the company’s top management stated, “The input environment remains highly volatile and unpredictable. It has become more adverse since our last market update in February due to the ongoing war in Ukraine. Inflation on our cost of goods sold has increased from low teens to high teens based on current commodity pricing.”